Refinancing $500,000 from 7.50% to 6.50%
Estimated monthly saving
$443
$3,604 → $3,160 · closing costs $11,500 · break-even 26 months
Monthly saving after refinancing
$443
$3,604 → $3,160 per month (principal & interest)
Closing costs$11,500
Break-even26 months
Interest left on current loan$667,589
Interest on new loan$637,722
Net result over 7 years+$25,740
Refinancing looks worthwhile here: you recover the $11,500 of closing costs in about 26 months (rule of thumb: under 48 months).
Rate drop: 1.00%. Figures exclude escrow changes and any discount points.
What happens at nearby new rates
| New rate | Monthly saving | Break-even | Verdict |
|---|---|---|---|
| 6.25% | $525 | 22 mo | Worth it |
| 6.50% | $443 | 26 mo | Worth it |
| 6.75% | $361 | 32 mo | Worth it |
| 7.00% | $277 | 42 mo | Worth it |
Choosing the new term
| New term | New P&I | Monthly change | Total interest |
|---|---|---|---|
| 15 years | $4,356 | +$752 | $283,997 |
| 20 years | $3,728 | +$124 | $394,688 |
| 30 years | $3,160 | −$443 | $637,722 |
FAQ
Is it worth refinancing $500,000 from 7.50% to 6.50%?
Yes by the usual test: the monthly payment drops about $443, closing costs are roughly $11,500, and you break even in about 26 months. Over 7 years the net gain is about $25,740.
How much interest does refinancing save?
Your current loan has about $667,589 of interest left. The new 30-year loan carries about $637,722. On a pure interest basis the difference is $29,866 saved — remember the new loan also restarts the term.
What if rates drop further?
Every extra 0.25% lower on the new rate adds roughly $82 per month in savings on this balance, which shortens the break-even window.